Opportunities in China for Foreign Medical Companies As a Result of SARS

The Severe Acute Respiratory Syndrome (SARS) outbreak that occurred in the beginning of 2003 has caused many Asian countries to fortify their national health systems. Among them, China has announced 11 billion RMB (US$1.3 billion) in new funding for their troubled national health system as a response to the recent SARS situation. The epidemic has also resulted in increased business and profits for foreign medical companies in China. Roberta Lipson, CEO of Chindex, a US-owned medical equipment importer in China, said, “Our sales of high-heat and high-pressure sterilizers have more than doubled in the last two months [April and May 2003] over the same time last year.”

Another medical market that is expected to grow in China as a response to the recent SARS outbreak and the current focus on disease prevention is the vaccine market. Experts predict that the vaccine market in China will reach 2-3 billion RMB (US$240-360 million) in the next few years and will reach 10 billion RMB (US$1.21 billion) by 2006. It is forecasted that China’s vaccine market will grow approximately 15% per year compared to the global 10% annual growth due to the infancy of China’s market. Already, foreign drug manufacturers like Aventis Pasteur MSD, GlaxoSmithKline, and Merck & Co. have entered China’s vaccine market.

Aventis Pasteur MSD, a major multinational pharmaceutical company based in France, was the first foreign company that entered China’s vaccine market. It established Shenzhen Aventis Pasteur Biologicals Co., the first joint venture enterprise in China specializing in imported vaccines and marketing of vaccines for HIB, HAV, pneumonia, and influenza. GlaxoSmithKline is another multinational company entering China’s vaccine market. The company has invested over 30 million RMB (US$3.62 million) to establish a biological products company in Shanghai. The new company began production in June 2003.